Abstract
Some of the biggest contemporary challenges, like pandemics or the fight against climate change, can be described as cooperation problems. Short-term individual interests are thereby often at odds with what would be best for society. This problem is amplified by an increase in economic inequality and societies getting increasingly individualistic. Inequality and Individualism are both feared to diminish social cohesion and cooperation, leading to various undesirable social outcomes. Therefore, a better understanding of how inequality and individualism affect cooperation is required. However, empirical findings about the effects of unequal resource distributions in public goods games (PGG) are somewhat mixed. This study tries to further investigate these non-converging results by showing that heterogeneity has not been deployed consistently by previous studies. A new research design is proposed which compares collectivistic and individualistic groups to study the combined effects of individualism and inequality on cooperation. The results show no significant difference between collectivistic and individualistic groups. Surprisingly, the results reveal significantly higher cooperation rates in these two inequality treatments compared to the base version. However, heterogeneous groups show a great divergence in how successful they are in establishing cooperation. Further decision analysis reveals that the willingness to reduce the inherited inequality in the beginning of the game serves as a strong signal to increase group identity and foster cooperation. For groups with high group identity, inequality seems to possess a coordinative function, which can even increase cooperation.
Senn, Sebastian